“Pandora Media Inc. declined the most in six months after the largest Internet radio service reported user growth slowed in the third quarter,” Lucas Shaw reports for Bloomberg. “Active listeners for the Oakland, California-based company increased 5.2 percent to 76.5 million, a pace far slower than a year earlier, when Pandora reported a 25 percent rise. Users have been flat since June, when Pandora reported 76.4 million.”
“Pandora’s shares fell 13 percent, the biggest drop since April 25. Listener metrics are a focus for investors because the company is under assault by deep-pocketed rivals from Apple Inc. to Google Inc.,” Shaw reports. “‘Sluggish active user growth suggests that services such as iTunes radio and Spotify are hurting Pandora’s ability to attract new listeners,’ Michael Pachter, an analyst with Wedbush Securities, wrote in a research note.”
“Total listener hours increased 25 percent to 4.99 billion from a year earlier, though they fell slightly from the second quarter’s 5.04 billion hours,” Shaw reports. “The results weren’t sufficient given Pandora’s valuation relative to earnings, Scott Kessler, an analyst with S&P Capital IQ Inc., said in an interview.”
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